Today in Crypto Twitter Research

Quite an eventful week with incredible rate of use cases and tools growing for DeFi 💸

Next up covering something on Layer 🅾️ as that narrative grows in terms of exposure-interest!

Here are the latest research-twitter-defi news:

1. Maker governance delay kicked in + SCD is at 9.5%: https://news.1rj.ru/str/lobsters_chat/26602
2. SNX + ChainLink oracle bug "gave" 37K USD to users: https://news.1rj.ru/str/lobsters_chat/26604
3. Check who has admin keys and token allowances on you: https://news.1rj.ru/str/lobsters_chat/26608
4. fmETH 1:1 ETH flash loan experiment for security tests: https://news.1rj.ru/str/lobsters_chat/26610
5. 1inch knew about bZx flaws, but BzX almost neglected it: https://news.1rj.ru/str/lobsters_chat/26612
6. Too much money around, thus traditional venture funds grow in numbers: https://news.1rj.ru/str/lobsters_chat/26615
7. Nexus Mutual [insurance] paid out bZx claims. Proving its use case, but also "losing" AUM: https://news.1rj.ru/str/lobsters_chat/26616

Omg my first ACTUAL DeFi deposit 🦄

I read-research about it a lot, but 5% rates never made sense to me as risk-rewards. Some systems gave higher rates, but were either centralized or too risky. And then Andre and Michael came along. Their systems make more sense, audited, admin keys given away… tries to calm himself down

So what I did was:
1. Take USDT out of Binance [why did I even hold USDT, ew gross]
2. Put those on Ledger and then swap to Dai via https://1inch.exchange/
3. Put that into ytokens on iearn via defi zap https://iearn.finance/zap
4. That zap also turned my ytokens into LP rewards for https://y.curve.fi/

Done! Now I am getting 20% yearly rewards - ye, they drip alll the time. the rate is subject to fluctuations, but even if drops to 12% or so, it’s still very good.

Now fucking pray every night! If this stuff gets rekt, I know where those guys live 😡
Stressed af. Now make me rich, magic stable money! Don’t hack this stuff please I beg you… stressed af 🤪

Compound token 🦄 COMP

In that spirit, Compound is launching the testnet of its experimental governance platform today, complete with a trial version of its COMP governance token.

One of the largest DeFi platforms makes its own token. Acquired a user base, and now giving governance and hopefully dividends to token holders. What DAOs are supposed to be, but with a better approach?

https://www.coindesk.com/compound-extends-defi-ethos-to-itself-launches-governance-token

Net gain 420,182 🌀 ycurve [Curve + iearn] post-mortem

Wrapping tokens can be tricky. If they are algorithmically-pegged, going in <-> out requires liquidity. Liquidity can sometimes be there, and sometimes not. It’s not the same as cashing your USDC 1:1 USD because all reserves are always present there. Therefore, it can sometimes mean a 1% slippage depending on the size. And when the size you are trying to move is huge, you can end up with huge slippage as well.

That’s what happened recently with trying to swap ytokens, resulting in a few 100K as net gain/loss for users.

How is it different from trying to grab an Uber in peak hour? You pay x2 the rate because the liquidity of cars is low at that moment. But the key there is that you have perfect information about it. And that was probably the issue here as the uninformed user suffered due to now knowing.

It was an unreleased pool 😴 Some did not wait, took risks, and this was the result. This is a normal thing really.

0x818 after attempts at discussion blocked us and has since deleted their social media, their net gain was 139,957.

“The events above are based on user interaction and were not a flaw of either the Curve or iearn systems. Both functioned exactly as designed.”

🤔 https://medium.com/@andre_54855/post-mortem-28-02-2020-6d675a85a33b

STEEM my buns, Justin! or "Tron fucks up #69"

1. Buying Steemit. Justin Sun, founder of Tron, bought Steemit - the most and only* useful application on STEEM blockchain: https://www.coindesk.com/steemit-sets-up-shop-on-tron-network. Imagine it's like buying Consensys [hahaha] which builds and kinda runs on Ethereum [Consensys an integrator though - not an app, so not the closest comparison]. The idea was to move Steemit to Tron and acquire those users and community members this way. Only later he would find out he fucked up.

STEEM blockchain is DPOS. And Steemit as the biggest app has a ton of foundation tokens. Ye, Justin got them now... Essentially, he could get the majority vote?

2. STEEM community casting Justin out. The people who run the Steem blockchain executed a reversible soft fork Sunday, stopping one of the largest piles of tokens from voting: https://www.coindesk.com/justin-sun-bought-steemit-steem-moved-to-limit-his-power. So now Justin needs to do something. He got the app & the tokens, but is thrown out!

PS: actually decent reporting by coindesk, wuuuuut.

3. CEXes helping Justin. CEXes, who control most of the supply, jump in and help replace the witnesses on the blockchain using users' balances without consent. Hello EOS, sounds familiar? And that's makes Justin the boss of STEEM blockchain essentially, giving him both the app and the network control now.

4. CZ coming forward saying they will remove the vote: https://twitter.com/cz_binance/status/1234574737768095746. CZ says the team assumed it was a network upgrade they must help with, no intention or information about hostile takeovers: https://twitter.com/cz_binance/status/1234577727077916673

5. Justin says "the community" won while he is the only one left alone in control now... total joke - https://twitter.com/justinsuntron/status/1234690483298820097

Why does this matter? STEEM is one of the OG cool working communities and a DAO that actually makes sense. Today, they suffered from an economic design of "big boys rule" which is how this thing works anyway in real world. But with the exception that here it was manipulated without consent.

not your 🔑 not your 💸 not your 💪

One is left to wonder what those quasi DeFi-influencers would do WEN eth moves to PoS. Seeing their recent actions, likely to see even more amateur shit actually 🦄

CryptoBriefing nicely on the matter: https://cryptobriefing.com/tron-executes-hostile-takeover-steem-exchanges-collude/

failure to hack the physicist's formula 🗣👀

kerman looked into iearn+curve [ycurve] post-mortem transactions closely and wrote a report: https://defiweekly.substack.com/p/part-1-defi-madness-ft-curve-iearn

well he's probably realised that if he can drain the USDC then the exchange rate between USDC to BUSD will be highly favourable allowing him to profit $246,747. Similarly, he could drain the DAI pool and exchange it for USDT and profit another $44,692

since curve formula is not linear, but is a market maker, a certain threshold can turn the calculations from minimizing the slippage rate to maximizing it in order to rebalance the pool...

a-ha! no. that's what the guys estimate the "hacker" was trying to do, but it would have not worked in either case

see curve response 🦄 https://twitter.com/CurveFinance/status/1234842704506507264

The attacker could either end up with net zero (minus fees), or lose money if he was front-ran. And the latter is what has happened.

check what smart people are saying on the matter -> @lobsters_chat

Speculation 🧐 Looks like TrustWallet is making a token after all. Probably a no-brainer to see it as an IEO on Binance.

Their tweet about them having a token: https://twitter.com/TrustWalletApp/status/1235208021497634818

​​VCs buying from the market 🤑

That's the dream for any team. And that's the goal for any team. When you can somehow convince a VC in a so-so market to invest in a coin 800K USD - you are damn good. Congrats!

More "smart money TM" buying off the market 🤓

Previously, the dump-on-next-round model was easier and better, but in this season people got smarter (hint: they never will be fully smart) so everyone waits for some traction and validation on the secondary market before jumping in. That's because every first candle goes down, so it's normal to see this behavior.

Buying off the market is something we might see happen more as capital becomes more value-oriented (warning: this is a meme). Money still flows in the market, but it's not as widespread among 1000s of alts as it's used to be. Surely, people arbitrage and trade all penny stocks, but a few penny stocks will capture the most volume and liquidity. CoinFund has been doing this more as a hedge fund, and many others have been doing it on the sidelines. But not to hold and stake per se, more as trading - which makes sense as crypto assets are super seasonal and hype-driven.

Is it hard to get whales to buy your coin? Not thaaat hard, but making them hold it - is the way to go. More retention, more healthy appreciation. Just buying and selling a day later is not the effect you want to go for.

Valuating your bags 📈

The valuation methods and PMF analysis (product-market fit) are still unset and it's still all very experimental, but some already try these models of buying off the secondary market. a16z with SNX and MKR, and we will likely see this trend continue. However be careful being sold snake oil. For VCs, this money throwing around is a job, they have to deploy. Don't buy every Kyle Samani's shill, but also don't ignore it. In this particular case, Placeholder VC, Chris Burniske, added 800,000 USD worth of ANT (Aragon). I am personally surprised by what he saw there - because despite being an OG project - they have always struggled and have always been slow with delivering, not my go-to project. Anyway, props to them for convincing a big bag to enter. Here is the tx: https://etherscan.io/tx/0x673b79ad2e5de106e768574b958c22a547a59a9b01e7ea73c331ade36a6970b3

Have a token to shill or any token-tech-business question? Just jump in the chat 🤗

Update 🦄 Tim Draper also just bought 2.5% of ANT (Aragon) which is over 1,000,000 USD: https://www.theblockcrypto.com/linked/56417/venture-capitalist-tim-draper-bought-1m-ant-tokens-to-join-the-aragon-network

At the moment of collapse there simply was not enough buy orders in the books for liquidation engine to sustain offloading.

Here is another, more in-depth rumour thread on how BitMex could have influenced the BTC rektage 👉 https://twitter.com/lowstrife/status/1238818943147507713

The original post was by Alameda (FTX): https://twitter.com/SBF_Alameda/status/1238306306043162625

In a nutsheel, the argument is: risk was calculated poorly and allowed to hudreds of millions to be liquidated at once while the book had 0 depth. So when you said before no one could have sold that much BTC, why - this is actually true. It was degen leveraged positions causing harm to everybody because profits & insurance fund are also in BTC.

​​Perlin didn't cure cancer 😷

PERL didn't cure corona either. Here is a mind-blowing update from the infamous moneygrab. I am bored, so FUD included.

First, in short ❌ PERL IS REKT AF

1] Tech team could not complete mainnet on time
2] Mainnet will probably never be completed
3] Thus, PERL will remain as an ERC20 shitcoin
4] Kenta leaves the CTO position, goodbye
5] Perlin will be doing enterprise stuff (LOOOL)

https://medium.com/perlin-network/updates-on-wavelet-fae5ae5675e6

The story 🤐

2018: Started as a hackathon idea, it's believed that Perlin got funding committments months before there was any team. Dorjee (CEO) grabbed Kenta Iwasaki (CTO) - a brilliant developer - from one of the ETH events somewhere around spring time 2018. That being said, FBG somehow invested in December the year before that, in 2017. Anyway, settled on changing the world with the highest TPS blockchain, it was the time when fundraising was still booming. It was the CryptoBriefing magnificent code review that fostered insane hype around the SAFTs, and trapped many plebs during the summer of 2018. Pool of a pool, friend of a friend, and dozens of millions of USD are in the pocket. Going on to raise multiple valuations screwing over everybody they could, left investors breathing in relief when PERL finally got liquidity... stretched over 2 centuries, but liquidity nonentheless.

Counless battles on twitter with Emin over Avalanche and Snowflake, multiple fundraising rounds, disappearing team, hired family members, and more... That's what it ended up as. Perlin has left a footprint in the history of projects. There have been multiple rumours which are okay to talk about now as it seems, here are some of them:

- 2c seed round for FBG & Co, which was promised by Dorjee to not be the case; -> true
- His family member hired for a high position and getting huge paychecks; -> unclear
- Team leaving due to corruptness and inability to function as a company; -> true
🙄 smh what else do you need

I think this is one of the rare occasions when sending a crypto dude to jail is actually okay 😂 Fraud all across the board, to be honest. It's okay to not always accomplish big dreams, it's okay to lay off and pivot. But it's not okay when there are only lies. There was no tech delivered, no transaprency, no adoption. And no coin going up kek.

PS: Stay safu and please do social distancing. Get yourself Oculus Quest so we can play paintball and jerk each other off in VR.

BRRRRRR https://brrr.money *sound on*

Take time to read - https://medium.com/@allenfarrington/this-is-not-capitalism-5ed0a9d5dfa9

​​Calling the top & reviving Lobsters 🦞 HI THERE 🖖

Today is a boring post, but we need to catch up and put things in order.

Up until recently, people were still feeling rekt and thus there was little noise: just friendly discussions on fundamentals and products. As time passed by and BTC / markets kept going up - people started feeling safe again. Stimulus, priced in, whales - nobody knows. But why is that important? Even if the recovery idea is flawed, people seem to be ready to gamble again 🤷

While I still believe the economic effects are not nearly priced in and we will see more rektness in 2020... It's all a gamble! Nobody knows.

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1️⃣ BTC & S&P Decoupling Meme

People are/were fleeing to liquidity cash from assets, causing sell-offs all across the board. Including gold and digital gold BTC LoL. Now, they try to either clame correlation or say BTC has decoupled - but remember, they use statistics simply to fit their bias. Don't pay attention to that, it all depends on timeframes. Gold dipped but then revived. Same as BTC. Correlation? Meme. There is so much complexity in this question that I wouldn't even try to get into it. Muh familia is an x10 degenerate, not a debt expert. Check some screens below.

However, if major hedge funds and rich plebs start believing in decoupling, it's definitely a benefit. So yes, vote for decoupling sir.

2️⃣ Currencies = stableshits

Holding cash is perceived to be safe by 99% of the world population, especially doing 3% yearly rates in a bank, wow! Well, don't forget to check for inflation and the relation with USD. If you help rubbles, you are so rekt now. Even your higher 7% interest rates in riskier countries would land you destroyed. This is a topic for the next post which should include more juicy info. But the message for now is: cash is not the same everywhere, and it's not nearly as stable purchasing power. Everyone here knows it, but the charts are still fascinating.

3️⃣ Onlyfans for ETHereans

No, it's not about onlyfans. It's about selling your brain's future cashflows. This is not a new thing as human IPOs have been performed many times. Let's not get into the legalities of this bullshit. Anyway, it's not a good sign as you sell off the most important asset to you - yourself. A toxic ETH dude Alex got 20K like this, and more people attempt to use Gitcoin grants to sell their time... it's a freaking terrible idea and the fanatics should have a limit to this stuff. Check: https://bit.ly/3cR4pPs

4️⃣ Alts ripping - your wallet dipping

Alts seem to be popping all across the board. People buy and fomo again, but the volumes are still small. What is clear is that traders are okay to engage again. SOL, HIVE, CARTESI - have popped a few X from their adjusted market caps: https://news.1rj.ru/str/Generation_Crypto/1161. Does it mean the projects are good? Absolutely the opposite, but the valuations have been adjusted to the market. In 2017 it used to be 100M, in 2018 50M, in 2019 25M, now it's 15M and below. Less liquidity, less buyers, what else do you expect. But it doesn't mean big seasonal moons can't happen.

With xDai STAKE BitMax, and JUST Poloniex going next - we might see good performance if BtC stays fine? That's the assumption, who knows.

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Sorry for the boring one, most of the info here is known to you. It's a summary of the past month as not much has happened. DeFi security is a special topic so we will look into that and more stuff later. Good luck out there gambling, don't forget to bring in interesting whitepapers to @lobsters_chat and hope you are safe.

Interesting links

- Global market trends - tech is going nice: https://meetglimpse.com/covid19/
- Covid-19 trends from China old: https://twitter.com/Nik_Quinn/status/1241436772808056834
- Permabear material, don't agree per se: https://www.crescat.net/crescat-capital-quarterly-investor-letter-q1-2020/
- Nothing about Oil being negative. No, gtfo. It was only a short period for WTI. Still rekt, yes.

Is BTC halvening priced in? 🤔

Think Amazon will beat the next earnings? That's already been priced in.

You work at the drive thru for Mickey D's and found out that the burgers are made of human meat? Priced in. You think insiders don't already know that? The market is an all powerful, all encompassing being that knows the very inner workings of your subconscious before you were even born. Your very existence was priced in decades ago when the market was valuing Standard Oil's expected future earnings based on population growth that would lead to your birth, what age you would get a car, how many times you would drive your car every week, how many times you take the bus/train, etc. Anything you can think of has already been priced in, even the things you aren't thinking of.

You have no original thoughts. Your consciousness is just an illusion, a product of the omniscent market. Free will is a myth. The market sees all, knows all and will be there from the beginning of time until the end of the universe (the market has already priced in the heat death of the universe). (c) reddit

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So: no one knows! However, really high volatility - orange coin go up and down - is expected. Be careful riding, and don't get shaken off. Otherwise, you will become "Le Pleb".

Did it again fam, one more for the team 🚀 Imagine holding 3 years to sell "the bottom"...